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Service Tax liability on reimbursible expenses - Service TaxExtract Hello...Good morning sir, Recently, on being paid visit by Audit team in my friend's unit engaged in rendering taxable services as clearing and forwarding agency, they have raised observations in respect of expenses incurred by him on behalf of their clients/customers and reimbursed the same from them by raising invoices (showing in invoice but counted in taxable value) as well as debit notes. The audit team stated that such reimbursed amount would also form part of the gross taxable income w.e.f 14.05.2015 as amended by Finance Act, 2015 in terms of Section 67 of the Finance Act, 1994 .In other words, such expenses would not form part of gross taxable value, but after amendment all the reimbursed expenses would be added in gross taxable value. Here, I solicits your valuable suggestion as to whether I should disagree with the objection as audit period covers between 1.04.2014 to 33.03.2017 or deposit the amount as pointed out. And also provide necessary circular, instruction etc. issued by the Board.
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